Disruptive Innovation: Bad For Some Old Businesses, Good For Everyone Else

from the also-known-as-'progress' dept

I recently joked that it felt like the main purpose of Kickstarter seemed to be to convince the world they wanted simplified wallets and fancy ink pens. If you don't spend much time on Kickstarter, you may have missed that those two categories seem to account for a somewhat-larger-than-expected percentage of projects that people find interesting. The wallets, in particular, fascinate me, because thereareanabsolutelyinsanenumberofnewwalletprojects, withnearlyeverysingleoneclaimingtohavereinventedwallets. I had no idea that the wallet market was open to such disruption.

Of course, it may be open to an entirely different form of disruption. As Nick Bilton at the NYTimes recently pointed out, as his smartphone has been able to do more and more, he's beginning to think that wallets may be becoming entirely obsolete. There's almost nothing he still needs to carry on his person since nearly everything that used to be in his wallet can now be taken care of via his smartphone:

Printed photos, which once came in “wallet size,” have been replaced by an endless roll of snapshots on my phone. Business cards, one of the more archaic forms of communication from the last few decades, now exist as digital rap sheets that can be shared with a click or a bump.

As for cash, I rarely touch the stuff anymore. Most of the time I pay for things — lunch, gas, clothes — with a single debit card. Increasingly, there are also opportunities to skip plastic cards. At Starbucks, I often pay with my smartphone using the official Starbucks app. Other cafes and small restaurants allow people to pay with Square. You simply say your name at a register and voilá, transaction complete.

But wait, what did I do with all of the other cardlike things, like my gym membership I.D., discount cards, insurance cards and coupons? I simply took digital pictures of them, which I keep in a photos folder on my smartphone that is easily accessible. Many stores have apps for their customer cards, and insurance companies have apps that substitute for paper identification.

It's not entirely obsolete, but Nick makes a compelling case that it's heading in that direction. To be fair, many of the new wallets seen on Kickstarter are, in effect, responses to this trend. The most popular styles appear to be "simplified" or "minimal" wallets that shrink down what you have to carry, so that you can just take the few essential cards with you. But, it's possible that many people will be able to get by entirely without a wallet in the not-too-distant future.

This, in turn, reminded me of something else: about how disruption may destroy industries while making our own lives better in the process -- but that simple economics tends to do a bad job recognizing that. I've talked about how traditional economic measures might measure the wrong thing. So, if we're looking at wallets, for example, those in the wallet-making business might claim that this move towards the digitization/smartphonification of everything is "bad" for the "wallet industry." That's obviously silly, and most people aren't too concerned about the wallet industry. But that ignores just how many industries are being totally upended by the smartphone. Think of all the things you don't need any more due to the smartphone. A few months back, the Cato Institute put together a fun chart on "dematerialization" due to the smart phone, trying to make the argument that advances in technology, such as the smartphone, might also be good for the environment, since they lead to people needing a lot fewer physical devices, since they're all packaged into that tiny device in your pocket:

Of course, what this also points out is the nature of disruption and innovation. Disruptive innovation, by its nature, destroys entire industries or segments of industries by making them obsolete. If you simply measure the economic impact on the fact that those industries are no longer present, or that those products are no longer being sold for hundreds of dollars, you could argue that there's a negative impact on the economy. But, if you flip it around and look at (a) how much better our lives are, in that we have access to all that at the touch of our finger tips in a single smartphone, and (b) that as compared to buying all those other devices, individuals actually get to keep more money to themselves (though, not necessarily in their now obsolete wallets) to be spent in more productive ways, it seems like it's actually a really good thing.

But this is something that we often struggle with from a policy standpoint. While no one claims to be missing "the fax" industry, lots of industries at risk of disruption will do all sorts of things to angle policy makers into blocking that disruption, by arguing about the economic impact of their own industries, and falsely implying that, if they're disrupted away, all of that money somehow "disappears" from the economy. But the nature of innovation is that we make things obsolete by making other things better and more powerful and changing the way we do things. The end result is, generally speaking (and, yes, there are exceptions), better for everyone, enabling them to do more with less and do so more productively. Whether it's a "wallet" or the entire list of things in the graphic above, progress has an amazing way of destroying old ways of doing business, and we shouldn't fear or worry about that, we should celebrate it.

Copyright has been an obstacle to every technological advancement. Next up is the 3D printer (a misleading name for what it is, to be honest: I'd prefer to call it the "Plastic Cloning Machine"). And you know what? I cannot wait for the mountains of evidence that will come from the 3D printer falsifying copyright even further. It will join the internet, the VCR, tapes, etc.

It's no coincidence that copyright and technology are at odds with one another. Copying is just not allowed to be so easy... for the good of humanity, apparently.

Just imagine the fun when gov't zeroes out your accounts!

That's easily possible NOW, will soon be widespread. Read Orwell's "1984" with knowledge of a cashless society and gov't able to remove all access to automated networks. Recall that this tactic has already been used against Wikileaks.

1984. We is NEARLY there. And Mike thinks "we shouldn't fear or worry about that, we should celebrate it"!

Re: Re: Re: Just imagine the fun when gov't zeroes out your accounts!

I said this in another post a while ago: the country with the lowest levels of piracy in the world right now is North Korea.

Really shuts up those who say "Communistic China has the highest levels of piracy in the world!", doesn't it?

For the record, China blocks free trade aggressively in the ways of iTunes for example, and most of Google plus free speech etc... sounds an awful lot like copyright industries, doesn't it? I'm not going to have it from copyright that it is somehow anti-Communist. All that free trade blocking causes that piracy since people have nowhere else to turn, and forever have to hide from the eyes of the government. And copyright by definition blocks trade.

Re: Just imagine the fun when gov't zeroes out your accounts!

That isn't about technology at all, it's about centralized anything. Think about it, you bitch that technology can be used to bring about 1984, but that possibility has been around ever since banks became popular. Why do you think 1984 was written in 1948? It was clearly possible back then.

How did the governmnet respond to the Wikileaks thing? Disable his Facebook account? No, they froze his bank accounts. That's not something that the iPhone is allowing, that's something that has been possible for decades.

Your arguments against technology are old and not about technology at all.

There are always going to be casualties as we advance into this new technological era. There is no way around it other than stopping all research and development.

The question we should ask is simple. Is it worth it?
100 percent yes! We gain so much my cutting down on materialistic needs which in return lets us use the saved materials for stuff that will require them forever.

Current laws in my state require the carrying of valid ID in public, and it is a misdemeanor to fail to produce if asked by a Peace Officer. As far as I know no issuing authority (DMV, etc) is issuing valid identification in the form of an App, though it would seem an easy, cheap, and smart way to go: here's your digital certificate, just hold your phone up to the officer's scanner and you're good to go.

This would be horrifying, yes, as businesses attempt to collect ID/demographic data (imagine having to show your ID to go into the comic shop) but also would offer the ability to look back, entitled 'sousveillance' by futurist David Brin.

Bruce Schneier has long advocated for ID cards themselves to be simple pointers into an official government database, secured and harder to tamper with. Imagine being able to verify that that cop really is a cop because his badge is also an NFC hot-spot. Impersonating an officer would be a lot harder.

It's technology, it will always cut both ways. It is exciting, and frightening, and amazing. As Randall Munroe also put it...The future's pretty cool!

Re:

Unless this is a new law, there is no state in the US that requires you to carry identification. There are states that require you to identify yourself, but simply saying who you are satisfies that requirement. If your identity is in doubt, in certain circumstances, the police may detain you (and possibly relocate you to, say, the police station) until your identity can be established. This is not the same as being arrested, but could feel like it.

Re:

Im pretty sure that, no one has a right to ask for papers without a VALID propable cause, its a shame they ALWAYS forget to mention that, maybe they think that if enough people who would rather comply then seek "hassle" will make everyone forget that if you know yourself to be inocent of the accusation then you have a right to say no, demand proof, or denounce lies if we so choose.

Response to Disruptive Innovation: Bad For Some Old Businesses, Good For Everyone Else

While I applaud the author's intent as i understand his intent, I would caution him and others that some of us, myself included are unfortunate, to live in non-highlly urbanized areas. I live a 1 hour drive from Sacramento, CA and yet have no cell reception in my house or any where within a 5 minute walk. Therefore I am stuck with a landline at home , and since I refuse to pay 50/Month for a landline, AND for a cell phone as well I have no such opportunities as the author. I could certainly use a debit card, but refuse to do so, since the gas stations charge 30 - 40 cents convenience or transaction fee , so I use cash instead to save my self 80 cents a week in Convenience and/or transaction fees.
I use the internet extensively at work, and at home, since I am lucky enough to be on the new AT&T substation I have a whopping 140 KiloByte/ sec download speed, the other 1/2 of the people in this area have no broadband options, except satellite, and at 70/month few can afford that luxury.
I have traveled to India, and South Korea for Work, and was given a cell phone to use on those trips, and had better Internet, and cell phone reception miles outside of any city, than what I have in my own home area.
Until the Government encourages/forces/allows competition between 3 or more providers I am resigned to this situation. Telco/Cable Corporations asking and getting more and more government money with no buildout of infrastructure to bring the other 15 - 20 % of us who live near a city with even basic broadband.
This is the digital divide, live in the city with all of it's digital services, or live outside the city and be more comfortable/safe/partially ruralized with few or no digital services.
REmember I live only 1 hour drive outside Sacramento, Ca and live only 1/2 drive from Roseville, CA where these services are also available.

Re: Response to Disruptive Innovation: Bad For Some Old Businesses, Good For Everyone Else

While I agree that high speed internet should be available nearly anywhere, you chose to live where you do, and there are consequences for any choice of where to live. You enjoy benefits that city dwellers do not, and that's the tradeoff you selected. The universal access fee thing is a travesty though.

Patently absurd

No, Mike, "progress" hasn't destroyed the wallet. And it hasn't, through the agency of "smart" phones, destroyed chess boards, thermometers, alarm clocks, television sets, cameras, metronomes, calculators or flashlights. Some of these things are tools which professionals use, and no professional is going to whip out a smart phone instead of that tool. ITunes is not a replacement for a stereo. Hulu is not a replacement for a TV. I usually like what you write but - sorry - this one is a dud.

Re: Patently absurd

No, Mike, "progress" hasn't destroyed the wallet. And it hasn't, through the agency of "smart" phones, destroyed chess boards, thermometers, alarm clocks, television sets, cameras, metronomes, calculators or flashlights. Some of these things are tools which professionals use, and no professional is going to whip out a smart phone instead of that tool. ITunes is not a replacement for a stereo. Hulu is not a replacement for a TV.

You'd be surprised -- and if it hasn't replaced them yet, it's getting closer and closer. For me, my smartphone has ABSOLUTELY replaced the need for both a stereo and a TV...

Re: Re: Patently absurd

If you're sincerely telling me you'd rather watch Lord of the Rings on your little iphone screen than on my (modest by today's standards) 42" flat screen, then I can only say de gustibus non est disputandum.

Re: Patently absurd

So, rather than replace completely, surely you admit that many of these items have been replaced for amateur or casual use?

"Some of these things are tools which professionals use, and no professional is going to whip out a smart phone instead of that tool."

...and no amateur is going to carry around a DSLR to take the occasional snapshot, a scientific calculator to split a bill, a heavy duty flashlight in case they need to find a key they dropped, a chess board to play on a bus, etc.

But that's not really the point of the argument. Of course there's always going to be a market for high grade pro equipment, decorative chess sets, giant HD TV sets and the like. Most people don't need those things, however, and more people don't need them than need them. Those pieces of equipment are increasingly niche products, not mainstream products.

Personally, my iPhone definitely replaces my calculator, watch, alarm clock, camera, flashlight, address book, dictation device, compass, even remote control in many cases (hooked up to an XBMC box attached to my TV). Between Spotify and podcasts, it's also replaced my CD listening to a great degree. Those things might not be the ideal high grade version of the services provided, but they're good enough for my needs and fit in my pocket.

"ITunes is not a replacement for a stereo."

Sorry, but for most people it is, especially if you don't give a crap about the quality difference between MP3 and vinyl and/or don't have a stupidly expensive stereo system to hook it up to. A docked iPod is perfectly sufficient for the needs of many people. Deal with it.

Re: Re: Patently absurd

The fact that we can replace so many objects with a smart phone allows us to view consumption and ownership differently, which is quite revolutionary. And if we don't need to own as much, we don't need to spend as much, we don't need big houses to hold the stuff, and we can be much more mobile.

Some members of Occupy Wall Street were mocked for having smart phones, but those smart phones are one of the reasons Occupy Wall Street could exist. If your office fits into your pocket, you can operate on the streets.

Re: Re: Patently absurd

So, rather than replace completely, surely you admit that many of these items have been replaced for amateur or casual use?

That's hardly the same as "destroyed". It's not even in the same zip code.

When an i-phone can survive being dropped on the ground without its screen being shattered into a zillion shards, and when its calculator app has all the functionality of a TI-83, it might be a viable alternative to a TI-83. But even then it will be absurd to say that "progress has destroyed the calculator".

even remote control in many cases (hooked up to an XBMC box attached to my TV)

Gawd -- you still own a TV??? That's SO last week.

decorative chess sets

Oh my... did you really write that? I haz a sad. You really believe that the difference between a smart phone app and a real chess board is the latter's decorative potential?

sufficient for the needs of many people

No, that's not the message of the creepy Cato graphic, and that's not Mike's message. He says "we make things obsolete by making other things better and more powerful".

Do you understand what the word "obsolete" means? Do you understand that "better" is subjective "more powerful" is relative?

Re: Re: Re: Re: Patently absurd

Re: Re: Re: Patently absurd

"That's hardly the same as "destroyed". It's not even in the same zip code."

That depends. If your business model depends on mainstream commodity use of a product, and most people using that product switch to using an app, then your business is destroyed if it fails to adapt. If you're set up to service a niche market, then you're successful. Besides, I don't see anywhere that anyone's claiming absolute destruction (although Mike mentioned that industries *may* be destroyed - that's not the same zip code as *will*, however).

"When an i-phone can survive being dropped on the ground without its screen being shattered into a zillion shard"

I've dropped mine a few times, including on the marble flooring so common here in Spain, yet the screen isn't even cracked let alone shattered. Maybe you need to take better care of yours, or at least invest in a protective case?

"when its calculator app has all the functionality of a TI-83"

You are aware that there's more than one calculator app available, right? Including ones that seek to emulate the TI83 directly? Maybe the real thing looks and feels better but it's also more expensive so it depends on the person using it. Personally, I have no need for a calculator beyond basic arithmetic and trigonometry functions so the built-in iPhone app fits my needs.

"But even then it will be absurd to say that "progress has destroyed the calculator"

When was the last time you honestly bought a calculator? The last time I bought one was while sitting some exams in the late 90s, and even then the only reason for that is because it had *reduced* functionality compared to some devices so I couldn't be suspected of cheating. This entire argument is moot, because I'm offering my own opinions, and I can't see of a reason why I'd ever buy a calculator. If your situation is different, so be it. But whose experience is closest to the average person? Are the daily needs of the average person better met by the iPhone or by carrying around a TI83?

"Oh my... did you really write that? I haz a sad. You really believe that the difference between a smart phone app and a real chess board is the latter's decorative potential?"

Again, in my experience yes. I don't play a lot, and most of my chess games are on Facebook or other platforms where I play with people I cannot physically be in the room with to play. I appreciate the artistry and design of a good chess set, but there's no other reason I'd buy one. I know at least one person who owns a chess set for display purposes but actually has no idea of the game's rules. Again, bravo if you find your situation different.

"Do you understand what the word "obsolete" means? Do you understand that "better" is subjective "more powerful" is relative?"

Well, you've definitely reached a different subjective understanding of the article, but I do know what those words mean. It's definitely personal opinion as to whether an expensive physical product with all desired functionality is better than a free app that offer 90% of it, for example - it depends on your needs.

Re: Re: Re: Re: Patently absurd

Personally, I have no need for ... there's no other reason I'd buy one ...

This is the substance of your thinking about the subject. You are arguing your solipsistic point of view: that which you, personally, have no need for must therefore be unnecessary to anyone else.

Please read again from the final paragraph of Mike's article:

" But the nature of innovation is that we make things obsolete by making other things better and more powerful and changing the way we do things. The end result is, generally speaking (and, yes, there are exceptions), better for everyone, enabling them to do more with less and do so more productively. Whether it's a "wallet" or the entire list of things in the graphic above, progress has an amazing way of destroying old ways of doing business"

Re: Re: Re: Re: Re: Patently absurd

Hmmm... I see where you're coming from but I really don't agree. I'm not saying that what I believe is correct for everyone, only that if enough people do then the old regime becomes obsolete. I'm sure that there's people who still consider Betamax, Super 8, S-VHS or whatever to be superior, but if most people prefer to take home videos on their iPhone or digital camcorder, then that format is obsolete. If people decide that having a calculator, camera, compass, flashlight and dictaphone on their mobile is better than having several separate devices, then those devices are obsolete.

I don't think anyone's saying the phone's better overall, and there will probably always be a market for niche high quality alternative devices. But, I doubt that you'll have people clamouring for a bulky calculator to put in their pocket if the phone app does the same thing, unless a real use case presents itself. No need to get angry, this is simply my opinion and personal experience. There are people who will buy new top end Rolex watches, but since I've owned a mobile phone I've not worn a watch of any description, and Casio knock-offs have probably suffered as a result of people who think like me. That's all I'm saying personally.

Re: Re: Re: Re: Re: Re: Re: Patently absurd

You do come across as angry, especially when you ignore some direct questions, as well as the bulk of the article. I understand that you disagree, but you're not really stating why, other than your disagreement with a couple of terms being used.

The graphic is an illustration of a point, nothing more, with a few of the flaws that such simple representations can have. The point is that for many people, a whole range of physical devices and media is being replaced by apps. Mike takes this a little further, noting that the industries involved in making the original products can be made obsolete and perhaps destroyed when such replacement becomes widespread.

You've not really made a case against any of these points, other than to note than an app may never completely replace a device for professional use or for people who simply prefer the original device. Fair enough, that's noted. But you're also not seeming to realise that it goes the other way - many people prefer the convenience and portability of an app, even if that means sacrificing some accuracy or durability. This inevitably results in less of those items being sold, and that affects the industry.

The problem is that you're making absolute comments, then failing to take into account that it's not always right - for example, you said "iTunes is not a replacement for a stereo" - then apparently ignored me when I noted that, for many people, that's exactly what it is. You apply opinions to myself that don't exist - for example, when I note that I don't need something, I'm not saying "nobody does", but rather noting that the industry making that product is in trouble if more people think like me than don't. You bring up points and assertions (the graphic is creepy), but don't state why.

Let's rephrase the argument here. There will always be a market for high quality devices such as the ones listed, especially for professional use or use in extreme conditions. But, as people get used to using smartphones for the functions, will these continue to be widespread mainstream products? That's the nature of disruptive innovation, and most of the industries that stand to be affected would not have predicted this 10 years ago. Those affected by these innovations are necessarily doomed, but they will need to adapt to a marketplace that no longer favours them in ways they could not have predicted. If they can't adjust to compete directly, or to service a niche market rather than a mainstream one, they are indeed doomed.

Re: Re: Re: Re: Re: Re: Re: Re: Patently absurd

You're modulating the message of the graphic and Mike's article. I don't in the main disagree with your last paragraph. But it isn't what the graphic conveys, and it isn't what Mike says.

>> especially when you ignore some direct questions

I thought they were rhetorical, but here goes:

>> Maybe you need to take better care of yours, or at least invest in a protective case?
Good for you that you've never broken the screen of your phone. Here are some of the people who haven't been so fortunate: https://www.flickr.com/search/?q=shattered%20iphone I bet if they had all carried their phones around in a box full of styrofoam, the screens would not have broken.

>> When was the last time you honestly bought a calculator? ... But whose experience is closest to the average person? Are the daily needs of the average person better met by the iPhone or by carrying around a TI83?
For the record, all of the calculators I bought were bought honestly. It's self-apparent that the average person doesn't need a TI-83 on a daily basis. But when a person needs a TI-83 -- in my case it was for college math courses -- then a TI-83 is what they need.

>> You are aware that there's more than one calculator app available, right? Including ones that seek to emulate the TI83 directly?
This would not have been permitted in any of the classes I attended. And I would not take a class where my fellow students are allowed to whip out their phones during an exam. I trust an explanation of this stance is unnecessary.

>> How is the graphic creepy, by the way?
The graphic is creepy because it's manipulative, deliberately presenting its chosen items in the most quaintly antiquated forms it can plausibly get away with (the telephone is a model that was already passing out of style when I was a boy), breezily suggesting that the existence of all those things (gosh! there's so many!) was somehow a problem that the iPhone's existence solves, breezily ignoring that for many of those devices, their form factor is inseparable from their utility, breezily implying that the output of the iPhone app is in each case equivalent to the output of the "antiquated" device, that the choice between the iPhone app and the device is a choice between equivalent things. It's creepy in the same way the question "have you stopped beating your wife" is creepy.

>> for example, you said "iTunes is not a replacement for a stereo" - then apparently ignored me when I noted that, for many people, that's exactly what it is.
You wrote: "A docked iPod is perfectly sufficient". This doesn't illustrate how iTunes is a replacement for a stereo. It illustrates how iTunes + iPod + a dock is a replacement for a stereo. Or rather, more accurately, iTunes + iPod + a dock IS a stereo.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Patently absurd

"Here are some of the people who haven't been so fortunate:"

So what? Some people are clumsy or don't take care of their equipment, and accidents do happen. What does that prove, exactly? I can send you lots of pictures of car crashes, but that doesn't alter the car's usefulness as a mode of transportation.

As for your TI83 comments - well done, you've identified one of the niche/specialist markets I've said exist. But you're missing the central point - MOST people needing a calculator will have their needs met either by the built-in app or buy an alternative they can buy. 20 years ago, all those people would have needed to buy a calculator for those functions, now they don't. The fact that you have needs that an app doesn't meet does not mean that most people are in a similar position, and that changes the size of the market for those devices.

"breezily suggesting that the existence of all those things (gosh! there's so many!) was somehow a problem that the iPhone's existence solves"

You're completely misreading it IMHO. I don't consider it to be saying any such thing. It's a list of examples of devices and examples of apps that replace them. Some of the devices are antiquated (why have what appears to be a Super 8 camera instead of a digital camcorder, for example?), while some of the apps chosen are questionable as well. But this isn't meant to be a gospel or definitive statement. It's a fun way of showing how many things can fit on an iPhones nowadays, and how many physical devices can conceivably be replaced by software. Anything more than that, and I think you're reading far to much into a simple illustration.

"It illustrates how iTunes + iPod + a dock is a replacement for a stereo. Or rather, more accurately, iTunes + iPod + a dock IS a stereo."

Exactly. So, you agree that a person who owns those items is no longer in the market for a stereo as they may have been 10 years ago? That IS the entire point of both the article and my comments. So what are you arguing about since you agree?

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Patently absurd

Not a bit of it. That's like saying a guy who owns a cooler doesn't need a refrigerator.

Are you arguing that there has been no decrease in sales of things like walkie talkies, paper maps, and radios since the advent of the smartphone? Or that since those things are still sold in some quantity then you object to some of the terms used in the article? Or what?

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Patently absurd

So, it's clear you're not willing to accept real points here, you're just going to ignore most of my comments and pretend that your own taste is all that matters? That because you don't personally wish to replace your stereo purchase with an iPod dock, most other people won't? OK, I thought as much.

Whether you like it or not, many people are doing exactly that. I can literally name 2 people I know off the top of my head who bought a iPod dock or set of computer speakers this year because they realise they don't have a need for a full blown stereo unit. I can name at least 2 more who bought a USB turntable so they can rip & play back their vinyl collection digitally rather than go to the expense of buying a turntable they can use with the vinyl directly. All of those people would have bought a stereo if the apps & docks didn't exist. Therefore, the stereo industry has lost sales. That's anecdotal, but it's also true.

Your opinion may differ, and perhaps your own personal experience, but they do not reflect the experiences and tastes of everybody.

Smart Phones:
Destroyer of my great Freelance Income.Totally wrecked my Audio and Video Work and as a result of them I have tens of thousands of dollars in gear growing dust.

Destroyer of my closest friend's Employment.She Graduated with a Masters and with high honors at SFA (School of Fine Arts) and was the lead graphic designer for a huge Company.Little by little they dumped off her staff and budget till they got to her.Really huge Resume and lots of great work but that can't save her from her fate.Books are dead......Ebook crud is not.
I will not be owning a smart phone until the day I am forced to get one in order to just have a phone.
You all can call me a cranky old dinosaur cause I do not care.

I assume every business in existence will be disrupted

Every business that is benefiting from current disruptions will, I believe, also be disrupted down the road.

I think some of the Internet companies that generate or hope to generate most of their income from advertising will see their revenue decline as people buy less goods and services and therefore become less response to advertising.

I am hoping that 3D printing is a major disruptor, too. I'm hoping economic systems flatten to such an extent that there is no economic value in large companies, and decentralization occurs on a mass level. It will be a very networked world, but not one where wealth and property are concentrated within a small group.

"They are economic practices but they don't have a for-profit motivation - such as barter networks; such as social currencies; co-operatives; self-management; agricultural networks; helping each other simply in terms of wanting to be together; networks of providing services for free to others in the expectation that someone will also provide to you. All this exists and it's expanding throughout the world."

Re: I assume every business in existence will be disrupted

"Every business that is benefiting from current disruptions will, I believe, also be disrupted down the road."

That goes almost without question. Of course they will, just as every other industry has. We just don't yet know exactly what form the disruption will take. Will it be technological or economic? Will it come from an American innovation or something produced in the developing world that catches fire outside the West? Will it be in the next decade or 50 years from now? We don't know, but it will be interesting to see.

The only thing is how they deal with said disruption. Will they whine and scream like petulant children because their cash cow is disappearing, begging governments for protection? Or will they realise that this is an inevitable part of progress and change their businesses to suit the new reality?

It will be interesting to see, but it is worth noting that the criticism of the current incumbents is purely down to how they've dealt with change, not a claim that the newer players are inherently better or perfect.

Re: Re: I assume every business in existence will be disrupted

The only thing is how they deal with said disruption. Will they whine and scream like petulant children because their cash cow is disappearing, begging governments for protection? Or will they realise that this is an inevitable part of progress and change their businesses to suit the new reality?

I think they will whine and scream. I'm hard on big tech companies because I already see signs of them behaving and justifying their behavior in a manner similar to big companies of the past. I think corporations use their money and power to stay in business.

Among tech companies, Apple is an easy target because they will use patents to suppress the competition.

But there are stories about Google sending lawyers after some little company for using the name Doogle, about Google lobbying, about Google sheltering its money oversees to avoid taxes (and in some cases transferring IP ownership overseas to do so).

Disrupting companies which then become big companies do what they have to do to block other disrupting companies. The disruptors become the establishment and fight to stay that way.

I think the whole system of starting a company, using an IPO as an exit strategy, and then becoming beholden to Wall Street fosters a certain behavior. Therefore, I am looking at entirely new economic models. I bring them up here a lot because I think the conversations here aren't nearly disruptive enough.

Re: Re: Re: I assume every business in existence will be disrupted

Yep, all big companies do things like that unfortunately. But it is more about competition among their own space at the moment rather than dealing with something truly disruptive. Everything you've mentioned is really just par for the course for any company over a certain size (patents, trademarks, lobbying, tax shelters - nothing surprising here).

I'm afraid you may be correct in that once they enter the corporate system they're prone to the same problems and mistakes as previous companies when they face something disruptive, but until a new system truly emerges it will be interesting to see how they deal with it when the time comes.

Re: Re: Re: Re: I assume every business in existence will be disrupted

I'm afraid you may be correct in that once they enter the corporate system they're prone to the same problems and mistakes as previous companies when they face something disruptive, but until a new system truly emerges it will be interesting to see how they deal with it when the time comes.

If natural disasters and water shortages become as frequent as some predict, we might have relatively little time to make a transition to something that works better. I think we're in the middle of a global economic shift as profound as the Industrial Revolution and it's going to be a bumpy ride.

Re: I assume every business in existence will be disrupted

Here. This is an example of what I want to see. The article mentions "scale up." That's what I think is wrong with much of Silicon Valley thinking. It is still based on "scaling up," where entrepreneurs want to build companies that will scale up and investors want to invest in companies that will scale up. But with that scaling up comes concentration of market share and power and I think companies of a certain size then begin to reconfigure laws and economics to keep themselves in business. I support movements that run counter to that. That's why I hope 3D printing (and the maker movement that builds up around it) becomes VERY disruptive, proving we no longer need huge multinationals.

Re: I assume every business in existence will be disrupted

This really nails it.

How to Fix Your Soul - Umair Haque - Harvard Business Review: "Imagine that I pioneer a wondrous nanomaterials startup that offers everyone a blindingly awesome new technology. What's likely to happen, without institutional innovation — without better building blocks for markets, corporations, and economies, in this case?

"Well, the first thing that's likely to happen is...nothing. Wall St and Sand Hill Rd probably won't bat an eyelid at my startup, choosing, instead, to do what they've been doing for the last decade or so: allocating capital to Groupon, Zynga, Facebook, and their ilk. But let's assume, for the sake of argument, that by some miracle of virtue, that they do invest in my amazing nanomaterials startup. What happens next? Well, without political innovation, I'll get rich, and my backers will get rich — but the middle class is likely to continue its long, slow slide into oblivion. The benefits of technological innovation, in other words, without institutional innovation, are likely to remain hyperconcentrated at the top — with all the attendant problems that stem therefrom: regulatory capture, political gridlock, mega-lobbying, middle class implosion, planetary destruction, and finally, more of the same: real economic stagnation."

I don't understand the surprisingly common assertion that integrated phone clocks have replaced wrist watches. Who wants to dig a phone out of their pocket to check the time, instead of just a quick glance at the wrist?

Absolutely stupid post

As someone already wrote here, most of the article is nonsense. iPhone is replacement of RF stuff? Unless Apple released new version I'm not aware about - not really.
That's OK, since Mike's understanding of technology is "internet radio==radio".
No, Mike, "radio" is transmitting stuff by invisible waves (really!).
He also probably don't seems to know that compass doesn't require batteries to operate. Same as books, notepad, shopping list.
Other examples are equally stupid. Flashlight - it's supposed to work for _hours_, not minutes. Answering machine - iPhone don't do that at all. Thermometer - no such sensor, not waterproof. And so on.

So, no, iPhone (or Android/whatever) not going to replace camera/compass/whatever. All this stuff have very specific purpose, and not going anywhere.

Re: Re: Absolutely stupid post

>> unless you think that the medium is what's important rather than the application.
Yea, responses like this happens when people don't understand technology. Do you know why police/ambulance/military etc still using RF and not cellphone-like communications? Ah, you seems to think that's because they are stupid. Hint - they are not. Medium _is_ important.

>> You use a flashlight for hours at a time?
Yes. When I have to change tire at night; or when I'm on trip in forest; or when there's power interruption or ...

>> Your phone battery doesn't last for hours?
When flash LED is on, your (iPhone) battery will be dead in about 15min. And you still want a phone, right?

>> You've never had voicemail on your mobile?
Your voicemail is not on your mobile. It's on provider side. Surprise! This mean, that when network is down you won't be able to hear it.

>> This is about as far you need to go to know you're not thinking about what you're saying.
Next time instead of "oh, shiny!" please take a minute and realize that people are still riding horses on this very day. Be sure they will continue to do so even when flying car is invented.

Re: Re: Re: Absolutely stupid post

"Do you know why police/ambulance/military etc still using RF and not cellphone-like communications?"

WTF does that have to do with listing to the radio (the connotation the infographic was using?). You're talking about a different use of the medium than the one being discussed. It's not particularly complicated.

"Medium _is_ important."

Indeed it is. The medium of radio is the best medium for professional and emergency communications like the ones you listed and that's important to keep available. But who the hell was talking about those before AC stuck his stupid nose in claiming that the article was referring to something other than music listening?

"Yes. When I have to change tire at night; or when I'm on trip in forest; or when there's power interruption or ..."

Cool. I don't, and even then the battery in my phone is sufficient to change a damn tyre or find an alternate light source in case of a power cut. That doesn't make me wrong, it just means that the phone is sufficient for my needs, whereas AC seems to think that Mike needs to be mocked for suggesting that most people don't need that in most cases.

"When flash LED is on, your (iPhone) battery will be dead in about 15min. And you still want a phone, right?"

15 mins? That's a real exaggeration - I've regularly used it for 5-10 mins at a time and it hasn't destroyed my battery life to that degree. Even so - again, use cases. You have a need for an expensive, durable hard wearing flashlight with hours of battery life? Cool. I don't. So, I won't buy one, and if enough people think my way then flashlight sales will drop. It's a simple point,is this really so hard to grasp?

"Next time instead of "oh, shiny!" please take a minute and realize that people are still riding horses on this very day."

So? Few use it as a primary mode of transportation, especially in the urban areas where it was in daily use 100 years ago. The industry has been disrupted, and anyone depending on making a living by selling and maintaining horses and their carriages for mainstream urban transportation is out of business. Same here - people will still buy the items listed as being "replaced" by apps, but they will be a niche market for pro and/or hobbyist uses - especially as the current technical limitations you harp on about are overcome. Nothing wrong with that - unless you're in an industry being disrupted and you refuse to adapt.

Stop trying to mock me and try to listen to the point actually being made, because you're missing it.

Re: Re: Re: Re: Absolutely stupid post

>> ... in claiming that the article was referring to something other than music listening?
Probably that's because article (picture) show icon of app called "Police Scanner". Is this music listening?

>> ... find an alternate light source in case of a power cut.
I wonder what kind of "light source" that could be? Probably flashlight! Or no, wait, I know - a torch!

>> You have a need for an expensive, durable hard wearing flashlight with hours of battery life?
"Expensive" is about $10 where I live. And that is high-end of things. Cheaper will go for $5.

>> and if enough people think my way then flashlight sales will drop
That's pretty big "IF". Do you realize that phones with flashlight exists for about 10 years? How sales so far?

>> Few use it as a primary mode of transportation
You're so cute. This was an example of widely used today "technology" which haven't changed for hundreds of thousand years. And it's still have no replacement in many applications (rough terrain/crowded places being example). It's not "niche market" and not going to be for many years to come. Btw - it was never "primary mode of transportation", because back in a day it was too expensive.

Same thing with "replaces items". Yes, I can use iPhone as calculator. But - it won't be allowed in school exams. Or too expensive for use in rough conditions.

And no, I don't in "disrupted industry" - I design chips for those very gadgets, so I have _some_ understanding here.

>> Stop trying to mock me and try to listen to the point actually being made, because you're missing it.
I'm trying to say that this point is ridiculous one.

Re: Re: Re: Re: Re: Absolutely stupid post

"Probably that's because article (picture) show icon of app called "Police Scanner". Is this music listening?"

No, nor is it the thing to which the moron above me was referring when he mocked Mike for talking about music listening (plus, you may note he didn't create the graphic). I'll admit I missed that there was also a police scanner mentioned on there - but do you honestly think it's being referred to as being replaced by an app for professional use rather than just for people who like to sit and listen into those bands? I doubt it.

"I wonder what kind of "light source" that could be? Probably flashlight! Or no, wait, I know - a torch!"

Or a lantern that gives out more light for the entire room. Or a box of candles. Maybe it's also cold and you light the fire instead. Maybe you just need to go downstairs and reset the fuse box. Don't get pissy at me because you can only think of one thing.

""Expensive" is about $10 where I live. And that is high-end of things. Cheaper will go for $5."

Dunno, haven't bought one for years because I don't need to. That's kind of my point, even if I was thinking a decent flashlight (as opposed to a piece of cheap crap that breaks when you drop it or stops working after a few minutes) was more expensive.

"That's pretty big "IF". Do you realize that phones with flashlight exists for about 10 years? How sales so far?"

Most phones don't have it built in as standard, and a lot of people don't realise that the iPhone, etc. Can be made to operate in that way. Flashlights are just an example, of course, perhaps a bad one from the overall list but the point still stands.

"It's not "niche market""

Really? I can't recall the last time I saw a horse that wasn't being used for tourist or leisure purposes, and that's hardly the biggest leisure industry. Maybe you see something else where you live, but I sure as hell see more cars than horses, which would not have been true 100 years ago.

Maybe you're right about the cost - I wasn't around then, but my limited grasp of history does tell me the problems cities like New York and London had with equine waste before cars became commonplace. Perhaps I leapt to assumptions, in which case I apologise.

"Same thing with "replaces items". Yes, I can use iPhone as calculator. But - it won't be allowed in school exams. Or too expensive for use in rough conditions."

Indeed. Speaking as someone who sat his last exam requiring a calculator over 15 years ago I am out of touch with what's required there. I've certainly never been in rough conditions where I've needed to use a calculator in ways that my phone couldn't handle. So, maybe I'm missing use cases here. I just assume that my needs for such a thing are more likely to be the needs of the average consumer - show me I'm wrong if you want, but I don't see it.

"I'm trying to say that this point is ridiculous one."

Which point? That industries can be disrupted by unexpected outside forces, or that an all purpose device can replace the need for many items for the average consumer? I don't see why either point is ridiculous.

>> I can't recall the last time I saw a horse that wasn't being used for tourist or leisure purposes
You making yourself to look stupid.
* Horse (or another animal) is primary mode of military transport in rough (rocks,desert) terrain
* Policemen on horse will meet you should you choose to join some "protest X" assembly

>> So, maybe I'm missing use cases here. I just assume that my needs for such a thing are more likely to be the needs of the average consumer - show me I'm wrong if you want, but I don't see it.
As with example with horses, you assuming that "average" means "average in New York".
Try to leave your iPhone for an hour in car during hot summer day. Try to turn it on. Surprise - error message tells you that device is too hot. So you thought you have compass+flashlight+camera+map+whatever else? No - you only have overheated brick. I'll leave rest to your imagination.
Next scene - you're working outside and it's winter (yea, some people need to build/dig/drive stuff). It's snowy weather and you're wearing gloves. So - capacitive touchscreen doesn't work at all and you can't pull you iPhone anyway because snow will destroy connectors.
You can continue list of example forever.
>> all purpose device can replace the need for many items
Talking about "average consumer" in this context is like talking about average temperature in hospital. Average consumer doesn't buy level _and_ compass _and_ flashlight _and_ fax at the same time. It's dedicated items for different uses and people.
iPhone as a flashlight is another reason to buy iPhone, not reason to throw away flashlight.
>> That industries can be disrupted by unexpected outside forces
Yes, but examples are so overstating that one may think that author is clueless about real world, not one seen from his window.

Re:

So, you agree that most people will have whatever needs they have for these devices met by a smartphone or other multipurpose device, and thus are less likely to buy the standalone products than they may have done 10 years ago?

You seem to agree with many of the points being made. Why are you arguing then?

"Try to leave your iPhone for an hour in car during hot summer day."

No, I value my phone enough not to leave it around to get damaged or stolen. I tend to use it enough so that it's more valuable to me in my pocket, thanks.

"iPhone as a flashlight is another reason to buy iPhone, not reason to throw away flashlight."

I never said it was. Why would you throw away a perfectly good flashlight just because you have an iPhone? On the other hand, if you don't have one but the iPhone app meets your needs, why would you buy a new flashlight?

Can we stop with the obsession over flashlights now? There's better examples, as I've stated.

Disruptive Innovation

“Disruptive Innovation” is a term that people like me in the IT industries are very well aware of. I have been involved in this industry for the past 9 years and have seen how it can impact the market and jobs. I knew about the existence of “Disruptive innovation” but never took it seriously till the iPhone came out. Surely there were other touch phones in the market at that time but what happened why did the iPhone became so popular. I am not trying to defend Apple but at that time they innovated and also made the other manufacturers re-think their strategy. Nokia makes great phone but they are struggling now. These days it’s true that if companies don’t innovate they lag far behind. Amazon, iTunes, eBay, Google are some of the examples that comes to everyone’s mind when you think about innovation. But it’s not like that their every product is successful. Out of the several products they release only few of them are accepted by the people. The fact they come with so many features and products tells us that they keep on innovating and experimenting continuously. Similarly the term “Disruptive Innovation” can be applied to any field. I agree with you as an individual these innovations do make our life easier but on the other hand it also forces us to keep on innovating so that we don’t lose our jobs. There are responsibilities in everyone’s life. There are several questions that often keep popping in my mind. They are :-
“Out of the so many different technologies and innovation that happen each year how do we know what will ultimately be disruptive to the current market? How do we shield ourselves from such disruptions that might take away our jobs? Is innovation the only key to survive? “
I think I have some ideas which I should implement in order to shield myself but there is a long road ahead. Another good article on this topic :- http://www.dalecallahan.com/when-will-innovation-disrupt-your-life/.